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What comes next for the Middle East's aviation sector?

The Middle East is already the home of the world's third-busiest airport, but the region's aviation schemes are continuing their upward trajectory

The Middle East's aviation sector is set to grow in the years to come [representational image].

Airport schemes worth $49bn are under way in the GCC [representational image].

by Neha Bhatia

11 Jun 2018

The Middle East is home to the world’s third-busiest airport, but its aviation sector shows no signs of slowing down.

Dubai International Airport (DXB), which recorded 88 million passengers in 2017, witnessed the third-highest number of travellers last year, preceded by the US’s Hartsfield-Jackson Atlanta International Airport (104 million passengers) and China’s Beijing Capital International Airport (96 million passengers), according to data released by ACI World this April.

Dubai’s aviation numbers are likely to continue their upward trend as the city prepares to host Expo 2020 – an event that will not only attract visitors when it opens on 20 October, 2020, but also encourage the influx of professionals participating in the megaproject. However, Dubai’s neighbouring cities are also on track to receive more passengers as new aviation hubs take shape in key Middle Eastern cities, such as Abu Dhabi, Riyadh, and Jeddah.

All major airport projects in the region have reported progress since the year began. Earlier this month, a milestone was announced on the back-up power system of Bahrain International Airport's billion-dollar modernisation scheme.

The development includes the construction of a new passenger terminal, in addition to the expansion and refurbishment of the existing terminal. The new terminal covers a built-up area of 20.7ha, and will include a 4,600m2 departure hall, 104 check-in counters, 36 passport control booths, and 24 security checkpoints. Upon completion, the project is expected to raise the airport’s capacity from the current nine million passengers a year to 14 million per year.

A central utilities complex (CUC), comprising the airport’s emergency system, has been constructed to supply power and water to the new terminal. The CUC required a new back-up power system to ensure airport ops proceed as planned if main power fails. Two standby generators were installed for back-up power requirements.

Additionally, Bahrain-based Rumco Group was picked to deliver a pipework system that will transfer fuel from the bulk storage tanks to the generator day tanks. Four new underground bulk fuel storage tanks, each with a capacity of 70,000 litres, will hold the diesel for the generators, and UK-made Durapipe PLX pipework will be used to feed the generator day tanks.

In 2016, a joint venture of Arabtec and TAV was named main contractor through a $1.1bn (BHD414.1m) contract for the project, which includes the construction of a new terminal building, a main services building, and an aircraft bay. UAE contractor Arabtec is also working on the Midfield Terminal Building at Abu Dhabi International Airport through a separate JV comprising Turkish contractor TAV and Consolidated Contractors Company (CCC). Their JV was awarded a $2.9bn (AED10.8bn) contract in 2012 to build the 70ha Midfield Terminal Building.

Abu Dhabi Airports Company (ADAC), which is overseeing the Midfield Terminal Building’s development, has also helped supported the progress of other aviation hubs in the UAE this year. In March, it was announced that an Emirati-Egyptian JV would carry out the expansion of Fujairah International Airport through a $180m (AED661m) contract. ADAC and the Department of Civil Aviation of the Emirate of Fujairah had signed a memorandum of understanding (MoU) in 2014, through which the Abu Dhabi organisation was named to lead the Fujairah airport’s expansion. Additionally, as part of the MoU, ADAC offered its resources for the project’s planning stage, and will also provide administrative assistance during construction.

Orascom holds a 60% share in the JV picked to implement the project, which also comprises the UAE's Al Sahraa Group. The contract’s scope comprises main infrastructure works for the airport's expansion, including the extension of the existing runway, and the development of an air traffic control tower, an emergency runway, rapid exit taxiways, and special airport systems. In a press statement this March, Orascom said that the project reiterates its "strategy to pursue quality projects outside of Egypt, in sectors across the group’s core competencies".

In April, ADAC announced it would manage the Fujairah scheme’s construction phase, which will include third-party construction managers, design consultants, contractors, and other entities that are part of the expansion scheme. Commenting on the development, HE Abubaker Seddiq AlKhoori, chairman of Abu Dhabi Airports, said: “We are excited to see the fruition of the close collaboration with the Department of Civil Aviation of the Emirate of Fujairah during the planning phase during the past few years.

“[ADAC] is determined to play a key role in the expansion programme for Fujairah International Airport. We have dedicated professionals to equip Fujairah Airport with the knowledge and tools on how to accommodate their growth and increased volume of travellers.”

Contractor Orascom's aviation portfolio includes military and civilian airports the King Abdulaziz International Airport in Saudi Arabia, where aviation development is recording growth as well. This May, Dammam Airports Company (DACO) signed agreements with Vanderlande and Serco Middle East to build a baggage handling system and bolster fire safety measures at Saudi’s King Fahd International Airport. DACO inked a deal with Vanderlande to build an automated baggage handling system, and a separate contract with Serco Middle East to install fire and rescue services at the airport. Serco Middle East’s contract with DACO paves the way for the installation of fire and rescue services at the airport. It the first time ever that a Saudi Arabian airport has used an international service provider for firefighting systems, according to DACO.

Privatisation is playing a pivotal role in the development of Saudi’s aviation sector. In June of last year, Saudi Arabia's General Authority of Civil Aviation (GACA) signed contracts for the development and operations of five airports in the country. The contracts covered the King Abdulaziz International Airport in Jeddah, Taif International Airport, Qassem's Prince Nayef bin Abdul Aziz Al-Qassim Airport, Hail International Airport, and Prince Abdul Mohsen bin Abdul Aziz Airport in Yanbu.

A deal was signed with Singapore's Changi Airports International to operate King Abdulaziz International Airport for a 20-year period. Meanwhile, a contract to develop and operate the new Taif International Airport was inked with CCC and Munich Airport, in collaboration with Asyad Holding.

Ninety-five aviation projects are active in the GCC, with a combined value of $49bn, indicating the sector’s strong growth prospects in the years to come. Included within these – besides the airports listed above – are the $12bn-worth greenfield New Kuwait Airport, and the $4.6bn-worth passenger terminal expansion at Kuwait International Airport (KWI).

The New Kuwait Airport, currently in the concept stage, and KWI's under-construction terminal expansion, are both due for completion in 2022. Of the 95 projects, 68 developments, worth $45bn, are airport and terminal projects, while the remaining 27, valued at $3bn, include hangar, runway, and ancillary facilities, according to data released by BNC Network.

The Middle East’s governments are pushing ahead with the development of aviation schemes as the region readies for Expo 2020 Dubai, and other similar high-profile events, in the years to come. Regional business leaders must consider expanding their aviation-savvy departments to keep up with this pace of development.

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